Government ‘misled’ unitary over cyber attack support, say councillors | #government | #hacking | #cyberattack

A report by Redcar and Cleveland BC members says the council’s executive was “misled by the government as to the level and speed of financial support” it would be offered following a major cyber-attack.

The council’s IT systems were taken down in February 2020 after malware was downloaded from an email onto a council computer.

The initial forecast of the cost of repairing the damage was around £16.4m, but the council later reduced its forecast to £10.1m – the total it later requested from the government.

The report to the scrutiny and improvement committee – written by a sub-group of councillors on the committee – says that “from the outset of the cyber-attack, the secretary of state for housing, communities and local government had told the executive that the government would take responsibility for costs arising from the cyber-attack”.

“This was later confirmed by the minister of state for regional growth and local government.”

According to the report, the council’s assistant director of finance initially suggested that a range of recovery measures should be considered based on cost.

However, this officer was later told by what was then the Ministry for Housing, Communities and Local Government that “the focus should be on the speed of recovery with costs discussed at a later date”, it says.

Initially, the council requested £10.44m, to be made available gradually as the cost of individual repairs became apparent, but this was rejected by the government in a favour of a one-time sum.

In March 2021 however, the council was informed that it would be offered a grant of £3.68m, provided through the government’s exceptional financial support process.

The council accepted this, believing it was “not in a position to turn down any amount of potential additional grant funding”.

It was also offered £1.22m as a capitalisation direction, but this was declined “due to the need to manage the council’s borrowing levels in a sustainable manner”.

The report highlights concern among council members about the reputational connotations of being associated with the exceptional financial support programme, through which other councils in financial difficulty agreed capitalisation directions with government – in some cases totalling tens of millions of pounds a year.

Referring to Redcar and Cleveland’s situation, the report says: “It became apparent during this period that the government did not have an appropriate procedure within the Managing Public Money process in place for providing support for local authorities funder these circumstances.”

It concludes that “the executive was misled by the government as to the level and speed of financial support”.

The report recommends that in future, leadership roles within the council are filled by those who have the experience and confidence to negotiate robustly with the government and other bodies to generate the best outcomes for the council.

A spokesperson for the Department of Levelling Up, Housing and Communities said: “We have given Redcar and Cleveland council £3.6m in additional support in the wake of the cyber-attack they suffered, as well as an extra £1.2m in capital flexibility.”

“The funding covered new IT equipment to return the council’s operations to a steady state as well as staffing and social care costs arising from the cyber-attack.”

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